Warren Buffett’s Berkshire Hathaway reveals Aon stake, slashes Chevron and Wells Fargo

warren buffett
Warren Buffett

  • Warren Buffett’s Berkshire Hathaway invested in British insurer Aon last quarter.
  • Buffett’s company also boosted its Verizon and Kroger stakes.
  • Berkshire reduced several positions including Chevron, Wells Fargo, and Merck.
  • See more stories on Insider’s business page.

Warren Buffett’s Berkshire Hathaway disclosed a new bet on Aon in a portfolio update on Monday. It also revealed that it took a knife to several positions and virtually eliminated its Wells Fargo stake last quarter.

The famed investor’s company bought 4.1 million shares of Aon, a British health insurer and pensions administrator, in the three months to March 31. It also boosted its Verizon stake by about 8% to 159 million shares – worth over $9 billion at the end of the period. Moreover, it ramped up its Kroger bet by over 50% to north of 50 million shares.

Buffett and his team trimmed several positions, which was expected given Berkshire’s recent earnings showed that it sold $3.9 billion of stock on a net basis last quarter. They slashed their Chevron stake, despite only establishing it last year, by just over half to 24 million shares worth $2.5 billion. They also reduced their pharmaceutical bets – AbbVie, Bristol Myers-Squibb, and Merck – as well as Liberty Global, Axalta, and StoneCo.

Notably, Berkshire cut its Wells Fargo stake from more than 50 million shares to fewer than 700,000. The bank had been one of Buffett’s biggest positions until last year.

The lack of purchases last quarter chimes with Buffett’s comments at Berkshire’s recent shareholder meeting. The investor said he was looking to invest about $80 billion of Berkshire’s roughly $140 billion cash hoard in stocks and businesses, but admitted he was struggling to find bargains in the current market.

Buffett cited the Federal Reserve’s continued efforts to pump liquidity into markets, which has boosted asset prices and fueled competition for acquisitions, as a key factor.

Read the original article on Business Insider

Companies across the US are offering workers perks for getting the COVID-19 vaccine. Here’s the running list.

covid vaccine card cdc
ICU nurse Megan Tschacher shows off her vaccination card at UC Health Poudre Valley Hospital in Fort Collins, Colorado on December 14, 2020. Helen H. Richardson/MediaNews Group/The Denver Post/Getty Images

  • Workers across the US can receive extra pay from their employers for receiving the COVID-19 vaccine.
  • Many front-line workers are now able to receive the vaccine in various states and localities.
  • So far, almost 34 million people have received one or more doses of the two-shot immunization.
  • Visit the Business section of Insider for more stories.

Companies across the US are joining in the largest-ever vaccination effort by offering employees perks if they receive the two-dose COVID-19 vaccine.

Receiving the vaccine is voluntary, but most companies have strongly encouraged employees get the immunization when it’s their turn. The two-dose vaccines, one from Pfizer and BioNtech and the other from Moderna, were emergency approved in the US in December. Since then, almost 34 million people have received one or more doses, according to data from the Centers for Disease Control and Prevention.

Many states and localities have begun moving from the first phase of vaccinating health care workers and elderly living in long-term care facilities to immunizing front-line workers. With that, some companies are giving workers two to three hours of paid time off per dose received, and others are offering a stipend for employees who voluntarily get the shots when it’s their turn.

Recently, Publix, Petco and AT&T joined the growing list. Here’s the 18 Insider knows about so far:

Know of a company not on this list that’s offering employees time off, pay, or other perks to get vaccinated? Email Natasha, the reporter of this piece, at ndailey@insider.com.

1. Target

Target
Eduardo MunozAlvarez/VIEWpress via Getty Images

Target is offering workers up to four hours of paid time off to get both shots of the vaccine and will pay for Lyft rides up to $15 for employees needing transportation to and from their appointment.

2. Dollar General

dollar general
Justin Sullivan/Getty Images

The discount chain was the first major retailer to announce an incentive for workers to get vaccinated. Dollar General employees can earn up to four hours of pay for receiving both doses of the COVID-19 vaccine and will receive extra time off if they have an adverse reaction.

Read more: What’s coming next for COVID-19 vaccines? Here’s the latest on 11 leading programs.

3. Darden Restaurants

olive garden
Patrons enter an Olive Garden Restaurant. Steve Helber/AP Photo

Darden Restaurants, which owns Olive Garden, LongHorn Steakhouse, Bahama Breeze, and The Capital Grille, will offer workers four hours of paid time off, two hours per dose, Bloomberg reported. Employees must show proof of their vaccination to earn the time. The company doesn’t require the shots, but strongly encouraged workers to get them.

4. Shake Shack

shake shack
Noam Galai/Getty Images

The burger-and-shake restaurant chain will give workers 3 hours of pay per shot of the two-dose vaccine. Shake Shack didn’t mandate employees receive the vaccine but “strongly encouraged” it.

5. Noodles & Company

Noodles & Company.
Noodles & Company.

Workers will earn up to four hours of paid time off for receiving the vaccine, the company said in a Feb. 10 statement to Insider. The restaurant strongly recommended employees receive the vaccine but did not require it.

6. Kroger

kroger
Kroger logo is seen at one of their stores in Athens, Ohio. Stephen Zenner/SOPA

The grocer is giving employees a one-time $100 payment for getting the vaccine. On top of that, Kroger said it would give associates an added bonus of a $100 store card and 1,000 fuel points to “thank and reward” workers during the pandemic.

7. Trader Joe’s

Trader Joe's.
Joe Raedle/Getty Images

The grocery retailer will offer all 50,000 employees two hours of pay per dose and allow for flexible scheduling so workers can make it to appointments.

8. Aldi

Aldi store shop
Matthew Horwood/Getty Images

The German grocer will cover employee costs associated with receiving the vaccine and provide two hours of pay for each of the two doses received.

9. Instacart

GettyImages 1153149270
SOPA Images/Getty Images

The app will offer its US and Canada shoppers, who deliver groceries to customers, a $25 stipend to get vaccinated.

10. Lidl

lidl
Leonhard Foeger/File

The German grocery chain is encouraging workers to get vaccinated by offering its US workers $200 in extra pay if they receive the immunization.

11. McDonald’s

GettyImages 185747043
Scott Olson/Getty Images

The fast food chain is giving workers four hours of pay for receiving the vaccine. Though getting the shots is not required, the company said it will connect employees with groups that can answer questions on the vaccination, Restaurant Business reported.

12. Starbucks

starbucks barista drinks
Richard Drew / AP Photo

The coffee chain is offering workers two hours of pay per dose of the COVID-19 vaccine they receive.

13. Chobani

Chobani Greek Yogurt
Sarah Schmalbruch / INSIDER

Chobani will give workers up to six hours of pay, three per dose, for receiving the vaccine, Human Resource Executive reported.

14. Amtrak

Amtrak
AJ Packer/Shutterstock.com

Amtrak is allowing employees to get vaccinated during work hours, and will pay for two hours off if employees provide proof they received the shot. Workers will also be excused with pay for up to 48 hours if they have side effects.

15. JBS USA and Pilgrim’s

jbs meatpacking greely colorado
The JBS meatpacking facility in Greeley, Colo. Chet Strange for The Washington Post via Getty Images

The meat-packing company is offering employees a $100 bonus incentive if they receive the vaccine voluntarily.

16. Petco

petco groomers
Petco groomers. AP Photo/Richard Vogel

The pet-supply retailer told Insider it would offer employees a one-time payment of $75 for getting vaccinated. Plus, it will give a $25 donation to the Petco Partner Assistance Fund for each person who receives their shots.

17. AT&T

AT&T
People walk past the AT&T store in New York’s Times Square, June 17, 2015. Brendan McDermid/Reuters

AT&T is giving employees up to four hours of paid time off per dose, adding up to eight hours total for anyone who needs the hours to get the vaccine, a spokesperson said in an email to Insider. The company is also giving workers access to Castlight, a tool to help them find available vaccines in their area based on eligibility.

18. Publix

Publix grocery store night
Johnny Louis/Getty Images

Publix will give associates a $125 gift card to the store after they get both doses of a COVID-19 vaccine. Workers aren’t required to get the shots at Publix, but they will need to show proof of vaccination. The vaccine is optional, though encouraged, the company said.

19. Walmart and Sam’s Club

Walmart

Beginning May 18, Walmart and Sam’s Club will give its associates below the store manager level $75 for being fully vaccinated, the companies announced on May 14. Workers are required to show their vaccine card in order to receive this bonus.

Read the original article on Business Insider

A third-party seller whose baby-care business raked in $20 million in sales last year reveals his secret to selling on Amazon, Walmart, and Target

keababies
KeaBabies founders Ivan Ong and Jane Neo pose with their two sons.

  • Third-party sales are becoming an increasingly important facet of the e-commerce business.
  • Ivan Ong, owner of KeaBabies, earned $20 million in sales in 2020.
  • He shared his experiences selling on platforms, including Amazon, Walmart, Target, and Kroger.
  • See more stories on Insider’s business page.

There’s millions of dollars to be made as a third-party seller on online marketplaces run by Amazon, Walmart, and Target.

Just ask Ivan Ong, whose international KeaBabies business offers maternity and baby-care products and generated around $20 million in sales last year. KeaBabies’ products are also featured on third-party marketplaces like Kroger and Macy’s.

The brand, founded by Ong and his wife Jane Neo in Singapore in 2016, additionally utilizes Shopify, wholesaling website Faire, along with plenty of advertisements on Google, Facebook, Instagram, Youtube, to drive sales from its own website. Ong credited the company’s multi-pronged customer acquisition strategy to wanting to be present wherever customers are.

“E-commerce really exploded,” Ong said. “Our business doubled last year because COVID accelerated everything. We’re expanding very aggressively. So this year we are aiming for $30 to $35 million in terms of our annual sales.”

Amazon, where KeaBabies first began selling products in October 2017. is far and away the company’s biggest revenue driving platform. With a full suite of services through Fulfillment by Amazon, offering warehousing and delivery, the e-commerce giant simply has the lowest barriers to entry, Ong said.

In 2020, Amazon saw $386 billion – or 54% of its total net sales – come from third-party sellers. And larger merchants have sold their brands for an average of $5 million in 2021, as equity firms begin consolidating corners of the market. Research firm Finbold also found that the online-retail giant is adding 3,700 new sellers daily in 2021.

Every marketplace has its pros and cons

While Amazon represents KeaBabies most important marketplace, KeaBabies has also sold items on Walmart Marketplace for about two years.

Ong said that though total sales on Walmart make up about 5% of the total business the company pulls in on Amazon, the retailer does offer fewer “headaches” because there are currently less competitors on the site, and less instances of saboteurs using “black-hatting” techniques.

Meanwhile, Target is comparatively “very selective about who they partner with” compared to most sites. That exclusivity is a plus, according to Ong, because it allows brands to grow without a ton of competition.

“There’s a different strategy for Target,” he said. “For us to get in, it was about a year of getting our brand in front of the brand acquisition onboarding team, and then presenting our brand and pitching about why we should be on Target. It has been quite a chase.”

Meanwhile, Kroger proved to be an entirely different story, thanks to the brand’s recent push to expand its baby category that was seeing growth during the pandemic. The Kroger team ended up contacting KeaBabies directly, to onboard them onto their site.

“It was a pretty easy process for Kroger because they are trying to open up to more brands,” Ong said, adding that the company’s onboarding process was easy-to-navigate.

As third-party sales continues to grow, more brands will have to contend with attracting an array of retail partners and developing those relationships. But despite the challenges, Ong said the strategy more than pays off in the end.

“Our customers are modern moms looking to buy affordable but quality stuff for their babies,” he said. “Being on all these platforms lets you really access customers.”

Read the original article on Business Insider

Boulder shooting victims include 3 employees at the King Soopers grocery store and an Instacart shopper

king soopers employees
Three King Soopers employees died in a deadly shooting.

Three King Soopers grocery store workers and an Instacart worker were among the 10 people killed in a shooting in Boulder, Colorado on Monday.

Police released the victims’ names on Tuesday morning. Among them are three people who worked at the store: Denny Stong, 20, Rikki Olds, 25, and Teri Leiker, 51.

Leiker had worked at King Soopers for roughly 30 years, with her friend Lexi Knutson telling Reuters that Leiker loved working at the grocery store.

“She loved going to work and enjoyed everything about being there,” Knutson told Reuters. “Her boyfriend and her had been good friends and began dating in the fall of 2019. He was working yesterday too. He is alive.”

Olds was a front-end manager at King Soopers, The Denver Post reports. Stong’s profile picture on Facebook was framed with the words: “I can’t stay home, I’m a Grocery Store Worker.”

A representative for Kroger, the parent company of King Soopers, said in a statement to Insider that the company is “horrified and deeply saddened by the senseless violence that occurred at our King Soopers store.”

“The entire Kroger family offers our thoughts, prayers and support to our associates, customers, and the first responders who so bravely responded to this tragic situation,” the statement continued. “We will continue to cooperate with local law enforcement and our store will remain closed during the police investigation.”

Read more: Workers file new sexual-harassment complaints against McDonald’s

Lynn Murray, 62, was shot while visiting the King Soopers as an Instacart shopper. Her husband, John Mackenzie, told The New York Times she had enjoyed working for Instacart after retiring from her career as a photo director.

“She was an amazing woman, probably the kindest person I’ve ever known,” Mackenzie told The Times. “Our lives are ruined, our tomorrows are forever filled with a sorrow that is unimaginable.”

“Violence of any kind has no place in our society,” Instacart founder and CEO Apoorva Mehta said in a social media post on Tuesday. “Our teams are working with law enforcement and the King Soopers team to assist in any way we can. We’ve reached out to the shopper’s family to offer our support & resources during this unimaginably difficult time.”

Mehta added: “For those members of our community who were shopping in the Boulder area, we’re also ensuring they’re able to take the time they need to grieve and recover from yesterday’s tragic events.”

The shooting serves as a stark reminder of the risks that retail workers face on the job.

“For the last year our members and other associates have fought an invisible enemy, COVID-19, but today several innocent souls were killed by an evil human,” Kim Cordova, the president of the United Food and Commercial Workers Local 7, the union that represents employees at the King Soopers store, said in a statement.

Read the original article on Business Insider

Several patients at a Virginia Kroger clinic received an empty shot instead of COVID-19 vaccine

Vaccine distribution

A Virginia Kroger gave several people “empty” shots that were supposed to contain vaccines for COVID-19, according to ABC 8News.

The healthcare professional who gave the shots to less than 10 people believed that the syringes had been previously filled by a colleague before the appointments started, a spokesperson for Kroger told 8News.

At first, the company told outlets 8News and CBS 6 that the syringes contained saline but later clarified that they were completely empty. That risks pumping air into people’s veins that can cause air embolisms and block blood flow.

Read more: The 4 things the US is doing wrong in the fight against COVID-19, and what we should be doing instead

“All impacted customers were contacted and have received their COVID-19 vaccine. We thank these customers for their understanding and have apologized for their inconvenience,” a spokesperson for Kroger told Insider.

The clinic is investigating the matter to prevent a similar situation from recurring in the future, and the Virginia Department of Health is aware of the incident, they said.

The retail chain aims to double its vaccine capacity to 1 million doses per week.

As of March 13, about 20% of the US population has received at least one dose of the vaccine for COVID-19, Bloomberg data show. More Americans have received vaccines than have tested positive for the virus, that report said. At the current rate, it will only take about 5 months until 75% of the US population, enough for “normalcy,” according to Dr. Anthony Fauci, is inoculated.

Read the original article on Business Insider

Kroger is closing more stores in areas where the grocery chain would be forced to pay workers hazard wages

kroger
Kroger logo is seen at one of their stores in Athens, Ohio.

  • Kroger is closing 3 stores in LA after a new law mandated an extra $5 an hour for essential workers.
  • Kroger also closed stores in Seattle and Long Beach, California, following hazard pay laws.
  • Across the US, 134 grocery store workers have died and 28,700 have been infected due to COVID-19.
  • See more stories on Insider’s business page.

Kroger is closing three stores in Los Angeles after the Los Angeles City Council voted in favor of a hazard pay law that mandates large corporations to pay an extra $5 per hour to frontline essential workers.

The store closures – one Ralphs and two Food 4 Less locations – will eliminate the jobs of 250 employees, CNN first reported. The company will work to reassign within the company the employees affected by the store closures.

This isn’t the first time Kroger has closed stores after being required to pay essential workers hazard pay. Last month, Kroger closed two QFC stores in Seattle after the city implemented a hazard pay law requiring $4 extra per hour for essential workers, Insider reported. Kroger also closed stores in Long Beach, California, following mandates for hazard pay in February.

“City officials need to consider that grocery stores- in a pandemic- operate on razor-thin profit margins,” Kroger said when the Seattle stores closed in a statement to Insider. “The mandated extra pay makes it impossible to continue operating underperforming stores.” Kroger will work to relocate employees to other positions within the company.

Critics have taken aim at Kroger’s profits as the country’s largest grocery chain continues to cut jobs during a pandemic.

“This company took in $2.6 billion in profits last year alone. Some people won in the pandemic, most lost. Kroger clearly won and now faced with sharing their windfall with their employees they chose instead to destroy 250 families’ lives in the middle of a pandemic,” said John Grant, the president of the union representing grocery and drug store workers.

“This is not about hazard pay. This is about communities standing up to big corporations as they profit off thousands of infections and death,” Grant added.

“This is not a business decision. This is greed, pure and simple. This is Kroger sending a message to their employees that asking for their fair share won’t just cost them their jobs, but their community’s access to food as well,” said Michelle Seyler, the executive director of Clergy & Laity United for Economic Justice. “We are still in the middle of a global pandemic, and we should be caring for those who care for us, not taking away people’s livelihoods.”

In the US, 134 grocery store workers have died due to COVID-19, and 28,700 grocery store workers have been infected or exposed to the coronavirus, according to the United Food and Commercial Workers International Union.

Kroger isn’t the only company to come under scrutiny for the lack of hazard pay to essential workers. Amazon-owned Whole Foods stopped paying its workers an extra $2 per hour in June. Employees called on the chain to reinstate the hazard bonus.

Read the original article on Business Insider

The CDC is reportedly eyeing a ‘promising’ partnership with Dollar General to bring vaccines to rural communities, and Target is expanding access to shots with in-store CVS clinics

dollar general
dollar general

  • The CDC is eyeing a potential partnership with Dollar General, USA Today reported.
  • Dollar General has locations within 10-15 miles of rural communities in 46 states, the CDC said.
  • Target is now offering vaccine doses through over 600 in-store CVS pharmacies in 17 states.
  • See more stories on Insider’s business page.

In the latest efforts to expand access to COVID-19 vaccines, the Centers for Disease Control and Prevention is reportedly looking a partnership with Dollar General to bring vaccines to rural communities, while Target and CVS are working together to expand the rollout in 17 states.

Target began providing vaccine doses on Wednesday in over 600 CVS pharmacies located inside its store locations, the company said in an emailed statement to Insider. Eligible people can find an appointment through CVS’s website.

Shots are available at store locations in Virginia, New York, Alabama, Texas, Louisiana, Arizona, Hawaii, Ohio, Florida, South Carolina, Maryland, Connecticut, Massachusetts, Rhode Island, New Jersey, California, and Pennsylvania, the retailer said in the statement.

Target added that, “as states open up vaccines for frontline and essential workers, we’ll work with CVS and others to offer vaccines to team members within our stores and distribution centers in the future.”

Separately, the CDC is looking into working with Dollar General to expand vaccine outreach to Americans in rural areas, USA Today reported on Tuesday.

“We’re exploring a promising collaboration with Dollar General stores, which have locations that include refrigeration capacity within 10 or 15 miles of our rural communities in all but four states,” CDC director Rochelle Walensky said Tuesday at Health Action Alliance’s National Business Summit, according to USA Today. Dollar General has over 17,000 stores in 46 states.

Dollar General did not immediate respond to Insider’s request for comment.

Dollar General was the first retailer to announce plans to pay workers to get vaccinated. In January, the discount store said it will offer all 157,000 employees four hours worth of pay if they get the vaccine.

In February, the White House announced that over 40,000 pharmacies nationwide are set to receive vaccine doses to give to eligible people for free per the rollout of the Federal Retail Pharmacy Program for COVID-19 Vaccination.

Last month, select CVS Pharmacy locations began offering around 570,000 COVID-19 vaccine doses in 17 states as part of the program. CVS administered over three million vaccines and 15 million COVID-19 tests nationwide by mid-February.

The pharmacy chains and retailers partnering with the government in vaccine distribution include Walgreens, Walmart, Rite Aid, Kroger, Publix, Costco, Albertsons, Hy-Vee, Meijer, and Winn-Dixie.

To date, 95.7 million vaccine doses have been provided to people in the US, according to Bloomberg’s COVID-19 tracker. An average of 2.17 million doses per day were administered this week, according to Bloomberg data.

Read the original article on Business Insider

How ghost kitchens’ business models could threaten the future of traditional dine-in restaurants

Pasta Cooking in Industrial Kitchen.
Dark kitchens were already gaining popularity before the pandemic.

  • Dark kitchens are gaining popularity, enabling restaurants to cut costs during the pandemic. 
  • Spanish broadcaster RTVE estimated 25% of home food deliveries now came from dark kitchens. 
  • If the trend continues, traditional dining establishments will likely find it difficult to recover.
  • Visit the Business section of Insider for more stories.

The COVID-19 pandemic has changed the food industry forever and brought new trends with it.

Among them are “dark kitchens” or “ghost kitchens.”

Dark kitchens consist of premises where food is prepared for home delivery or collection but do not have a dining area or waiters.

The business’s customer service and dining area rental aspects are removed, cutting costs and enabling a direct relationship with consumers.

The concept was already gaining popularity before the pandemic, taking over fast-food chains and supermarkets.

Many restaurants also share premises and facilities to cut costs even further.

Over the last year, dark kitchens have grown exponentially in popularity.

Grocery giant Kroger announced in October that it was opening more dark kitchens to meet surging delivery demand, and Chipotle outlined plans to open its first dark kitchen in November, although the chain has been using digital kitchens within its restaurants for some time.

In many ways, dark kitchens have been the saving grace of the pandemic, allowing restaurants to continue operating despite restrictions that ban diners from visiting their establishments.

25% of food deliveries during the pandemic come from dark kitchens, according to Spanish broadcaster RTVE.

It’s not just restaurants that are catching on – it’s delivery giants too.

Food delivery firm Deliveroo, now worth $7 billion, said it would spend its latest funding win of $180 million partly on investing in dark kitchens.

This will enable them to increase their profit margins hugely as they will no longer be dependent on delivery commissions from restaurants.

However, there are concerns that dark kitchens could threaten traditional dining establishments, as they cannot compete with the larger profit margins, quicker deliveries, and lower prices offered by dark kitchen restaurants.

If they do not return in numbers equivalent to pre-pandemic levels, it will be difficult for restaurants to recover from the losses incurred over lockdowns and closures will be inevitable.

Read the original article on Business Insider

Kroger delivers fourth-quarter earnings beat, but expects 2021 sales to drop as the pandemic’s grocery boom tapers off

kroger
Kroger’s digital sales boomed in 2020 as its total sales grew by more than $10 billion.

  • Kroger reported its fourth-quarter and full-year 2020 earnings Thursday morning. 
  • The supermarket chain beat fourth-quarter earnings estimates, but forecast slower sales in 2021. 
  • In 2020, Kroger’s digital sales more than doubled. 
  • Visit the Business section of Insider for more stories.

Kroger on Thursday signaled a bigger-than-expected slowdown in sales of groceries this year as a pandemic-fueled demand that helped it top expectations for fourth-quarter results tempers.

The company, however, forecast full-year earnings above estimates, as it undertakes cost-saving initiatives in its sourcing, equipment purchases and supply chain, sending shares up about 1% in premarket trade.

Kroger’s sales surged last year as stuck-at-home consumers rushed in droves to the websites and apps of big national grocery chains to stock up on food and household essentials.

Kroger’s full-year 2020 sales were $132.5 billion, compared to $122.3 billion in 2019. The supermarket chain reported a $2.8 billion operating profit for 2020, up from $2.3 billion the previous year. In 2020, Kroger’s digital sales more than doubled, growing by 116%.

Analysts expect that sales growth would be difficult to replicate this year as the rollout of COVID-19 vaccines promises a return to relative normalcy, removing the need to hoard supplies.

Kroger expects adjusted full-year same-store sales to fall 3% to 5%, more than analysts’ estimates of a 2.5% decline.

The supermarket chain forecast full-year profit per share between $2.75 and $2.95, above analysts’ estimates of $2.69.

Same-store sales, excluding fuel, rose 10.6% in the fourth quarter, beating the Refinitiv IBES estimate of a 9.4% rise. 

Kroger reported a net attributable loss of $77 million in the fourth quarter compared to a profit of $327 million a year earlier, as it recorded a previously announced near $1 billion charge related to its withdrawal from a union pension fund.

Excluding one-time items, Kroger earned 81 cents per share, beating estimates of 69 cents per share.

Read the original article on Business Insider

How the fight over ‘hero pay’ for grocery workers reveals chain stores’ massive corporate greed

Grocery store worker, low-wage
A grocery store worker inspecting meats while wearing PPE during the pandemic.

  • Paul Constant is a writer at Civic Ventures and a frequent cohost of the “Pitchfork Economics” podcast with Nick Hanauer and David Goldstein.
  • In this week’s column, Constant talks about the ‘hero pay’ raises some stores like Trader Joe’s and Kroger adopted last year.
  • Kroger later blamed this raise for store closures, despite paying out billions in profits to the company’s shareholders.
  • Visit the Business section of Insider for more stories.

Last March, when lockdowns began, grocery store workers and delivery drivers were rightfully hailed as heroes of the pandemic. Even as restaurants and bars closed to stop the spread of coronavirus, grocery store employees risked their health, and the health of their families, to keep Americans fed while white-collar workers transitioned to home offices. From the very beginning of the pandemic they put on homemade masks to stock shelves, ring up customers, and keep the supply chain working when everything else shut down.

At the beginning of the pandemic, public respect for grocery workers was overwhelming and unanimous

Rodney McMullen, the chairman and CEO of the Kroger chain of grocery stores, was effusive in his praise: “Our associates have displayed the true actions of a hero,” McMullen wrote in a press release, acknowledging his staff for “working tirelessly on the frontlines to ensure everyone has access to affordable, fresh food and essentials during this national emergency.”

McMullen backed up his words of support for the heroes on his staff with a bold policy: Kroger, the largest grocery chain in the nation and the second-largest retailer after Walmart, announced on March 31, 2020 that it would “provide all hourly frontline grocery, supply chain, manufacturing, pharmacy and call center associates with a Hero Bonus – a $2 premium above their standard base rate of pay, applied to hours worked March 29 through April 18.”

Kroger’s Hero Bonus pay program eventually ended in May, two months into the pandemic. But the pandemic has continued unabated, and grocery store workers continue to live with a very high risk of COVID-19 infection. A Kroger-owned Fred Meyer grocery store in Seattle had an outbreak infecting 10 workers in December, for example. 

Although the risks for grocery workers are still very high, the hero talk has all but disappeared

And so has the hero pay: Kroger employees from around the country report on Indeed that baggers at Kroger grocery stores earn an average of $9.28 an hour, while cashiers report pay of $10.53. (Bear in mind, too, that those average wages are likely inflated due to cities like Seattle and New York City that embraced a $15 minimum wage .) According to nearly 37,000 employee reports, Indeed said, “Few people think they are paid fairly at Kroger Stores.” In exchange for putting their health on the line for a full year in thankless public-facing jobs, many Kroger workers earn wages that don’t even lift them above the poverty line. 

This year, leaders began to demand that grocery stores pay their employees extra during the pandemic. Lawmakers in Long Beach and in Seattle, among other cities, passed a $4-per-hour hazard pay bonus for workers at large grocery store chains. 

The laws brought some much-needed attention back to workers who have disappeared from the public consciousness, and that pressure seems to have worked: After Seattle’s City Council approved hazard pay, grocery chain Trader Joe’s responded by temporarily raising worker pay around the country by $4 an hour. 

This is great economic news for everyone: not only are workers being rewarded for performing tasks that white-collar workers would never do, but those workers also have extra money in their pockets, which they’ll spend in their communities – including at grocery stores. 

How Kroger responded very differently than Trader Joe’s

In both Long Beach and in Seattle, Kroger issued press releases announcing that they were closing two stores, blaming the hazard pay for the closures. 

I suspect the situation in Long Beach is similar, but since I live in Seattle I can better speak to the closures here. The two QFC grocery stores that Kroger is closing in Seattle are small, underperforming stores in upscale, walkable neighborhoods that have other – most would argue superior – grocery options nearby. (The other thirteen QFC stores owned by Kroger in Seattle will remain open, as well as Kroger’s three Fred Meyer stores inside Seattle city limits, where the hazard pay applies.) 

And, at least one of the targeted Seattle QFC locations had already been slated for redevelopment in the near future. In other words, it seems likely that Kroger could be exploiting stores that were failing before the pandemic to make the point they really want made – if city councils elsewhere try to raise wages, Kroger will continue to hold their employees’ lives and livelihoods hostage in order to keep wages low and profits sky-high. 

Giant corporations love to use splashy intimidation tactics like this to create fear-inducing headlines which help to peel support away from worker protections. But make no mistake: Even though Kroger’s press releases suggested that the grocery business relies on “razor-thin” profit margins, Kroger has been making a ridiculous amount of money during the pandemic. 

Because people have been working and eating at home over the last year, Kroger has boasted of record-breaking profits. For the first two quarters of 2020, reports the Detroit Free Press, its net earnings nearly doubled “to more than $2.031 billion compared with $1.069 billion in the same period of 2019.” 

In the third quarter of 2020, Kroger announced operating profits of $792 million

And with grocery spending in Washington state up by double-digit percentages since the beginning of the pandemic, it seems highly unlikely that hazard pay is the tipping-point expense that forced Kroger to pull the plug on these stores.

And while Kroger isn’t willing to pay the “heroes” its leadership loves to praise in press releases, the corporation happily opened their wallets for shareholders this year, paying out a dividend of 18 cents per share

Last year, Kroger said in a press release, “We have returned approximately $6.4 billion to shareholders via dividends and repurchased shares [also known as stock buybacks] since the beginning of fiscal 2017.” As thanks for returning obscene profits to shareholders, CEO W. Rodney McMullen received $21 million in total compensation in 2019, an increase of 76% over the year before and 798 times the median annual Kroger employee salary that same year. 

McMullen wasn’t the only one who received hero pay a year before the pandemic, ExecPay noted: “In 2019, six Kroger executives received on average a compensation package of $8.7 million, a 46% increase compared to previous year.” 

While Kroger can find plenty of money for its CEO, its executive team, and its shareholders, the corporation picks up its toys and heads home when city lawmakers ask it to increase pay for the frontline workers who have been putting their lives on the line so that Kroger can boast about their unprecedented profits. 

The math is clear: Kroger’s coffers are more than full enough to reward its employees for their essential work in the midst of a global pandemic. McMullen and his executive team apparently prefer to keep that “hero pay” for themselves.

Read the original article on Business Insider